Waiver, other tax reforms top GST Council's docket

New Delhi: The Goods and Services Tax (GST) Council is likely to consider a number of measures at its meeting on June 22 that are expected to set the tone for broader tax reforms in the first full budget of the newly elected government.

These include the conditional waiver of interest or penalty on tax notices issued between 2017 and 2020, barring cases of wilful default. The budget is likely to be announced in July.

The GST Council may also discuss crunching timeline for issuing notices, a monetary limit for pursuing disputes at the GST Appellate Tribunal, and a sunset date for anti-profiteering cases to reduce tax litigation and improve ease of doing business.


The proposed changes will bring relief to several sectors, including online gaming, insurance companies, banks, non-banking financial companies, airlines and shipping companies that are facing large tax demands.

Relief from Litigation
These, along with the proposed amendment to Section 11A, may allow the government to give relief to these sectors without seeking the Parliament's nod every time. The law committee under the Council has made a recommendation in this regard.

"It is essential that there is a mechanism provided in the GST legislation, using which relief can be granted on a need basis in certain situations," said MS Mani, tax partner at Deloitte. "There are bound to be instances where business/trade practices are not precisely aligned with the GST provisions, and this leads to litigation. In such cases, a window to offer relief in genuine cases would be very beneficial for businesses."

The council is also likely to take up a proposal allowing authorised personnel - instead of only CXO-level executives - to represent companies in cases where summonses have been issued to key management, people familiar with the matter told ET.

A proposal to align the refund of integrated tax paid on export of goods or services under bond or letter of undertaking with provisions under the Foreign Exchange Management Act is expected to figure on the council's agenda. The move is aimed at preventing misuse of the export route to launder funds overseas.

The council is likely to take up clarification on about a dozen issues including taxability of loans given by one group company to another, determination of the place of supply applicable for custodial services provided by banks to foreign portfolio investors and applicability of the levy on extra neutral alcohol for human consumption.

It will take up provisions of tax collected at source on ecommerce service providers and a proposal on creating a unique identifier for unregistered people opting to generate e-way bills.

India Inc's confidence in GST has risen to 84% in 2024 from 72% in 2023, according to a survey by Deloitte released on Wednesday. The survey has been done as the indirect tax regime is set to complete seven years of rollout in July.